Euro Area Economic Outlook
GDP should expand at a soft clip this year, restrained by sticky inflation, higher interest rates and global headwinds. However, the disbursement of EU funds should underpin activity. The main risk is a possible reignition of financial turbulence in the banking sector and a subsequent spillover to financing conditions for highly indebted Mediterranean countries.
Euro Area Inflation
Harmonized inflation rose in April, surprising markets on the upside by increasing to 7.0% from March’s 6.9%. Inflation should resume its downward trend ahead, curbed by tighter financing conditions and cooling domestic demand. A wage-price spiral poses an upside risk, as does a less-hawkish-than-expected monetary policy stance should financial turbulence reignite.
This chart displays Economic Growth (GDP, ann. var. %) for Euro Area from 2010 to 2022.
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Industrial Production (ann. var. %) | 2.8 | 0.8 | -0.7 | -7.7 | 8.9 |
| Unemployment (% of active population, aop) | 9.1 | 8.2 | 7.6 | 8.0 | 7.7 |
| Fiscal Balance (% of GDP) | -0.9 | -0.4 | -0.6 | -7.1 | -5.3 |
| Public Debt (% of GDP) | 88.1 | 86.1 | 84.1 | 97.2 | 95.5 |
| Policy Rate (%, eop) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current Account Balance (% of GDP) | 3.1 | 2.9 | 2.4 | 1.6 | 2.3 |
| Merchandise Trade Balance (USD bn) | 391.8 | 336.2 | 345.6 | 389.9 | 343.1 |
| Merchandise Exports (USD bn) | 2,554 | 2,752 | 2,677 | 2,493 | 2,965 |
| Merchandise Imports (USD bn) | 2,162 | 2,415 | 2,331 | 2,103 | 2,622 |
| International Reserves (USD bn) | 353 | 378 | 387 | 423 | 566 |
| GDP per Capita (USD) | 37,755 | 40,729 | 39,818 | 38,711 | 43,159 |
| Economic Growth (GDP, ann. var. %) | 2.8 | 1.8 | 1.6 | -6.2 | 5.3 |
| Private Consumption (ann. var. %) | 1.9 | 1.5 | 1.4 | -7.8 | 3.7 |
| Fixed Investment (ann. var. %) | 4.2 | 3.2 | 6.7 | -6.5 | 4.0 |
| Money (ann. var. of M2 %) | 4.6 | 4.4 | 5.8 | 10.9 | 7.0 |